USDJPY Daily Analysis: Bearish ABC Correction Points Toward 151.20–152.00 Support

Introduction

USDJPY remains under bearish pressure on the Daily timeframe following a sharp rejection from the 163.70–164.00 area. The latest price structure suggests that the pair may be developing a larger corrective pattern, with the current movement potentially forming the final Wave C of an ABC correction.

The chart shows a clear transition from the previous bullish structure into a corrective phase. After reaching the major high, price experienced a strong decline, followed by a corrective rebound that appears to have completed near the 159.90–160.00 region.

The current structure therefore favours a bearish continuation scenario, particularly if the market fails to reclaim the key resistance area around 155.00–155.50.

Major Bearish Structure Remains Intact

The most important feature on the Daily chart is the sharp reversal from the 163.70–164.00 region.

Price previously maintained a strong bullish trend, producing a sequence of higher highs and higher lows. However, the large bearish candle from the recent peak represented a significant change in market momentum.

Following this decline, price formed a corrective rebound and created the B-wave high around the 159.90–160.00 region.

The subsequent rejection from this area strengthens the possibility that Wave B has already completed.

If this interpretation remains valid, the market should now be developing Wave C to the downside.

Elliott Wave Interpretation

The current Elliott Wave structure can be interpreted as an ABC corrective formation.

Wave A developed during the initial decline from the 163.70–164.00 area toward the 155.00 region.

Price then entered a corrective rebound, forming Wave B. This rebound recovered a significant portion of Wave A but failed to break above the previous major high.

The rejection around 159.90–160.00 is therefore important because it provides evidence that the corrective Wave B may have ended.

The market is now expected to develop Wave C, which could become the next major bearish leg.

Ending Pullback Before Wave C

The most recent price action shows a small rebound after the latest decline.

This rebound is labelled as an “ending pullback” on the chart. In Elliott Wave terms, this could represent a short-term corrective movement before the market resumes the larger bearish structure.

The important point is that this pullback does not necessarily invalidate the bearish outlook.

Instead, if price remains below the highlighted resistance area, the rebound could provide the final setup before another decline.

A rejection from the 155.00–155.50 region would therefore strengthen the bearish scenario.

Fibonacci Structure

The Fibonacci measurements shown on the chart provide additional support for the projected downside movement.

The chart identifies the 261.8 Fibonacci extension as the major target area for the expected Wave C.

This creates an important confluence between Elliott Wave analysis and Fibonacci projection.

The projected target is located around the 151.20–152.00 region, which should therefore be treated as the main downside zone to monitor.

Rather than expecting price to move directly toward the target, traders should anticipate smaller corrective rebounds along the way.

Key Resistance Zone

The most important short-term resistance is located around 155.00–155.50.

This area should be closely monitored because a strong rejection here would indicate that sellers are still controlling the structure.

If price rallies into this zone and fails to break above it, the market could resume the bearish Wave C projection.

On the other hand, a strong Daily close above this resistance would weaken the immediate bearish setup and could force a reassessment of the Elliott Wave count.

Bearish Scenario

The primary scenario remains bearish.

Price may complete the current short-term pullback before turning lower again. Once the correction is completed, the expected Wave C could extend toward the lower Fibonacci projection.

The projected path is therefore:

Short-term pullback → resistance rejection → bearish continuation → Wave C → 151.20–152.00 target zone.

The 151.20–152.00 area is particularly important because it corresponds with the projected 261.8 Fibonacci extension shown on the chart.

Momentum Confirmation

The AO indicator at the bottom of the chart is also supporting the bearish structure.

Momentum has shifted strongly into negative territory following the recent sell-off. Although the indicator can experience short-term recovery during a corrective rebound, the broader momentum structure remains weak.

A renewed expansion of negative AO bars would provide additional confirmation that bearish momentum is returning.

Therefore, traders should monitor whether momentum begins to accelerate downward again as price approaches the resistance zone.

Invalidation Level

The bearish scenario should not be treated as unconditional.

A sustained break above the 159.90–160.00 region would significantly weaken the current Wave B completion assumption.

If price were to reclaim the previous B-wave high and establish strong bullish momentum above this area, the current bearish Wave C projection would require reassessment.

For this reason, the 159.90–160.00 region remains an important structural invalidation/reference area.

Trading Outlook

From the current Daily structure, the preferred scenario remains to look for selling opportunities during corrective rebounds, rather than chasing price after an extended bearish candle.

The key area to watch is the 155.00–155.50 resistance zone.

If price enters this region and produces a clear bearish rejection, the setup could support another downside movement toward the projected Wave C target.

The primary target zone is:

Target C: 151.20–152.00

A deeper extension below this area could occur if bearish momentum accelerates, but the 151.20–152.00 region should be treated as the first major objective.

Conclusion

USDJPY Daily remains structurally bearish following the rejection from the 163.70–164.00 major high and the subsequent failure around the 159.90–160.00 region.

The Elliott Wave structure suggests that the market may have completed Wave B and is now preparing for the next bearish leg, potentially Wave C.

The short-term rebound should therefore be monitored as a possible ending pullback. A rejection around 155.00–155.50 would strengthen the bearish continuation setup.

If sellers regain control, the next major objective is the 151.20–152.00 area, corresponding with the projected 261.8 Fibonacci extension.

Overall bias: Bearish — monitor the ending pullback for a potential continuation toward Wave C target 151.20–152.00.